A sample survey of more than 1,600 by Scottish Widows has found that whilst the vast majority of people had quite big dreams in terms of retirement, many were not saving enough and most planned to use their accumulated pension funds, if any, to fund their existing lifestyle expenses.
31% said they would pay off their mortgage. 41% said they wanted a luxury holiday. Only 14% said they would invest their pension for future security.
Our view
Another unsurprising survey. Whilst many industry commentators and so-called experts would chastise the public for taking this stance, the view at is very different when it comes to offering retirement planning advice.
Q. Did you know that if you have assets worth more than £19,500 (including your home) and you need care in later life - you will be required to pay for your own residential care? If you cannot afford the costs of c£24,000 a year - the local authority may take a charge over your home?
Visit Care Fees Adviser.com for more.
Q. Did you know that if your pension income is above a certain level then you will not receive the Minimum Income Guarantee (changing to the Pension Credit on 5 October 2003)?
Fact: The Inheritance tax threshold is not keeping pace with peoples wealth. Many people, particularly in the South East, with just their house alone being above the inheritance tax threshold of £255,000 will pay tax on death at 40%. (visit the Inheritance Adviser.com).
For those who have not bothered to save: If you had not bothered to save or struggle to pay a mortgage over the years like some people have not then:
1. Your care fees will be paid for by the state!
2. You will probably receive the Minimum Income Guarantee/Pension Credit. Quite simply, successive Governments have encouraged a culture of those who cannot be bothered to plan for themselves to get better benefits. When we advise clients we always look at the long term view - and take into account benefits that could be lost if you do save.
The message is clear and simple, by all means make savings, investments and pension contributions but - plan to spend most of what you have in your active life i.e. before you really are too old to enjoy it.
The first thing you have to do is work out how long you anticipate being active for. Be realistic. Then take advice from us.
Getting advice from us - visit our Help Zone to find out about all the different ways we can help you.
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